Demand for Mining Equipment Drops in Russia Amid Fears of Possible Ban, Report

Russian online marketplaces have observed that mining hardware is more frequently offered than sought. This trend started after the Central Bank of Russia (CBR), published a consultation document last month. In it, the regulator suggested a blanket ban of operations with cryptocurrency, including mining. It cited financial instability and investor risks.

RBC has been informed by a major online platform that while there were more ads for coin minting equipment, demand has declined. Marvel Distribution, one the most prominent Russian retailers of this type of product, also reported a drop in video card sales.

According to one source, January saw an increase in video card sales of 12% over December. However, demand for GPUs fell by 4%. The supply of mining rigs rose by 18%, but the demand for them fell by 9% over the month ending 2021. Listings for ASICs increased by 17%, while searches for specialized hardware fell by 27%.

A representative from another market confirmed the shrinking demand, noting that CBR’s report had been a turning point for consumer behavior. This is despite the fact that the monetary authority failed to get support from other institutions, and President Putin highlighting Russia’s competitive advantages as an mining destination.

The federal government offered an alternative strategy, betting that cryptocurrencies could be regulated rather than banned. Dmitry Chernyshenko, the Deputy Prime Minister, signed a regulatory map for the sector that did not initially cover crypto mining. A recent report from the daily Izvestia claims that Chernyshenko later directed several regulatory agencies and departments to include mining in the document.

Experts in the industry have doubted that it is technically possible to prohibit the extraction of digital currency. Russia, a country rich in energy, is one of the top mining hotspots worldwide. Its importance has grown since China cracked down on the sector last May. Officials in Moscow are calling for to recognize mining and tax it accordingly.